Evening star. [volume] (Washington, D.C.) 1854-1972, 1887-12-13

Senator Farwell Is the putatlve author OF oil
designed 20 perpetuate the issue feature OF the
national banking system, 50 seriously threatened
by the rate al which the redemption OF govern
ment bonds has been going on for the last rev
years The present law. which permits national
banks to issue currency 10 the extent OF ninety per
cent or the face value Of the bonds deposited as
redemption fund with the Treasurer OF the United
states Is 20 be modified so as To permit the de-
posit for a similar purpose, OF approved state ana
municipal bonds at seventy-fve per cent OF their
par value and Of certain railway first mortgage
bonds AZ fifty per cent.
IL is obvious that something must be done TO re-
neve the banks OF the pressure which now rests
upon them, and which has practically reduced
national banking to its original condition as the
privilege OF the favored few instead OF the right OF
any one who may choose to adopt IL as calling.
The chief glory OF the system next 10 It's safety,
has been Its freedom II may be questioned, how
ever whether IL Is expedent 70 place In the Secre
tary OF the Treasury and the Controller OF the
Currency so broad a discretion as the Farwell
bill propOses-enabling them TO select for the
basis OF circulation any state, municipal or rail-
way bond they may choose, limited only by the
requirements that 10 shall be first mortgage,
that its market value shall be par more, that 1t
shall pay not less than four per cent interest that
such Interest shall have been regularly paid up TO
the time the deposit Is made, and that, In the case
OF railway bonds, the total amount received on
deposit shall not exceed i've hundred millions OF
dollars When IL Is remembered that secretaries
and controllers follow each other in ONCE in more
or less rapid succession that the act OF one OF
these officers cannot be held binding upon his sue
cessors and that the market In good state, munich
pal and railway bonds Is q wide one, 10 is plain,
that even with the most conscientious purpose OF
being fair the secretary and controller In office to-
day might endorse their approval upon securities
which the secretary and controller In office next
month or next year would regard as unworthy OF
such credit
Moreover, the enactment OF the proposed statute
would open the way for charges and ordinations
whenever the securities OF a certain railway CON-
pany for instance took a boom In the market In
response TO a sign Of approval from the Treasury.
The use OF the stockholders money TO pay inter-
est regularly and shrewd manipulation on the ex-
changes, might make and keep cOmpany's bonds
within the pale prescribed by the law long enough
TO have them duly endorsed, and, II the high off,
GERS OF the Treasury were led into a trap set for
them In this way by SPECTATORS. their own repu-
tations would recover with difficulty from the
strain 10 which they wOnld be subjected. In spite
OF these possible shortcomings, the Farwell bill
may, with some notifications, be made acceptable
as onerfng the easiest way out of a predicament
Whatever Is done for the relief OF the banks and
people VINO use their currency, will OF course. In
view OF the importance OF the matter be done with
the greatest care and elaboration. The national
system has proved so nearly ideal In its workings
under Its present conditions that IL would be a
pity 20 do anything calculated 10 shake public
confidence In IT,